Kenneth Hensley v. Lillian Koller, 722 F.3d 177

DSS provided adoption subsidies under the Act; payments for BLH were $675/month with a difficulty of care adjustment due to special needs.
In 1999, DSS and BLH’s adoptive parents entered an Adoption Subsidy Agreement for $675/month; BLH’s adoptive status was established by a state court in 1999.
In June 2002, DSS reduced all foster care and adoption subsidies by $20 due to budget constraints, including BLH’s subsidy remaining at $655; 2004 adjustments did not rescind the 2002 reduction.
BLH’s guardians (the Hensleys) filed a 2011 class action under 42 U.S.C. § 1983 asserting violations of federal rights arising from the subsidy reduction.
The district court certified the class and granted cross-motions for summary judgment; the Fourth Circuit reversed and remanded, addressing whether § 673(a)(3) creates a privately enforceable right and whether the Directors violated that right.
The court ultimately held that § 673(a)(3) creates a limited privately enforceable right but that the Hensleys failed to plead a violation of that right, and that the Directors were entitled to qualified immunity, leading to reversal and remand for judgment consistent with the opinion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does § 673(a)(3) create a privately enforceable federal right?	Hensleys contend the statute creates a private right to parental concurrence.	Directors contend the provision is not a privately enforceable right.	Yes, § 673(a)(3) creates a limited privately enforceable right.
Did the Directors violate that right by reducing subsidies in 2002?	Hensleys allege the readjustment violated parental concurrence rights.	Reduction was compelled by simultaneous foster care cuts; no violation.	No violation; reductions aligned with foster care reductions.
Are the Directors entitled to qualified immunity given the asserted right and facts?	If a violation occurred, damages would follow; seek equitable relief as well.	Qualified immunity shields from damages when rights are not clearly established; no violation here.	Yes, Directors are entitled to qualified immunity; case reversed and remanded for judgment consistent with the opinion.

Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) (private rights under federal funding provisions require Blessing-type analysis)
Blessing v. Freestone, 520 U.S. 329 (1997) (three-factor Blessing test for privately enforceable rights under 42 U.S.C. § 1983)
ASW v. Oregon, 424 F.3d 970 (9th Cir. 2005) (statutory rights under adoption programs can create private rights if mandatory terms exist)
Saucier v. Katz, 533 U.S. 194 (2001) (two-step qualified-immunity inquiry; right determined first when appropriate)
Pearson v. Callahan, 555 U.S. 223 (2009) (allows addressing the prong of clearly established law at the outset in some cases)
Akers v. Caperton, 998 F.2d 220 (4th Cir. 1992) (clear establishment limits for official immunity in 1983 suits)